Creditor Relations

Financing principles

Conservative financing structures constitute the central and basic idea of Vossloh's financing strategies. In the management of its capital structure, Vossloh focuses on the key data for companies with an investment grade rating. The financing of a group of companies generally takes place through Vossloh AG as a group holding company. High creditworthiness of contracting parties plays just as significant a role as our commitment to building and maintaining long-term relationships with our lending partners. Derivative financial instruments are exclusively used for hedging existing or foreseeable underlying transactions.

Financial position

The net debt of Vossloh Group significantly decreased from €283.0 million as of December 31, 2014 to €200.1 million as of the end of December 2015. At the end of 2015, the Vossloh Group’s financial liabilities amounted to €279.3 million, and were thus below the corresponding figure as of the end of the reporting period of the previous year (€330.8 million). The total of cash and cash equivalents as well as short-term securities increased to €79.3 million as of December 31, 2015 (previous year: €47.8 million).

In particular, current financial liabilities declined as of the end of the reporting period in December 2015. These liabilities amounted to €25.9 million, while they saw a significant increase to €281.0 million in the 2014 financial year as a result of bridge financing for the early repayment of the second tranche of the US private placement that was taken up in 2004. In 2014, financing of €250 million with a term until June 2015 had been agreed with several banks in order to fund the US private placement. In April 2015, Vossloh AG found a new basis for its medium-term financing framework by successfully concluding a syndicated loan of €500 million and repaid the bridge loan. The loan is structured in two tranches and has a term of three years starting from April 23, 2015, and therefore provides a stable medium-term financing basis. €200 million has been made available to the company in the form of an interest-only loan, €300 million in the form of a revolving credit line, i.e. a flexibly available credit line.

Breakdown of financial liabilities

€ million20152014*
Other long-term liabilities to banks253.449.8
Noncurrent finance leases0.00.0
Noncurrent financial liabilities253.449.8
Short-term liabilities to banks24.9280.6
Interest payable1.00.4
Current notes payable0.00.0
Current finance leases0.00.0
Current financial liabilities25.9281.0
Financial liabilities279.3330.8

* Prior-year figures presented for comparative purposes (see page 121 of the 2015 Annual Report).

In 2015, a syndicated loan of €500 million with a term of three years was concluded between Vossloh AG and eleven banks. In this context, there is a liability of €200 million throughout the entire term and a credit line used in different amounts, which is adjusted at short notice in each case. The interest rate depends on the amount of specific indicators known as covenants; at the same time, a breach of the thresholds defined in these covenants leads to an early right of cancellation on the part of the lending banks. The following items were identified as covenants: (1) the ratio of net financial liabilities to EBITDA, (2) the ratio of EBITDA to the net interest result and (3) the equity ratio. The covenants are checked for compliance on a quarterly basis; the first check was performed at the end of September 30, 2015. The covenants were complied with both at this time and over the year as a whole.

For the reconciliation of the financial liabilities to the IAS 39 valuation categories, see pages 149 ff. of the Annual Report under "Additional Information on Financial Instruments."

Covenants exist for two US Group companies in connection with bank credit lines, which as of the balance sheet date were not utilized.